Financial Times: Shell to give Watts £1m pay-out
By Gordon Smith and Sundeep Tucker in London
Published: June 25 2004 12:08 | Last Updated: June 25 2004 12:55
Sir Philip Watts, the former chairman of Royal Dutch/Shell who resigned earlier this year after it was revealed the oil group misbooked 20 per cent of its reserves, will receive a £1m ($1.8m) severance payment, Europe's largest oil group said on Friday.
The £1,057,971 lump sum pay-out is based on the salary the former chairman would have received up to his retirement date of June 2005.
Sir Philip and Walter van de Vijver, former head of exploration, stepped down in March after investors blamed them for the reserves debacle in which the company misbooked 4bn barrels of crude oil.
Shell said Sir Philip would not receive a performance-related annual payment in respect of this year or last year, but that he would retain previous stock options.
News of Sir Philip’s pay off was welcomed by UK investors.
Peter Montagnon, head of investment affairs at the Association of British Insurers, said: “We have always maintained that we didn’t want him to be paid a penny more than he was contractually obliged. That seems the case and that is good.”
The severance payment revelation comes ahead of what is expected to be a difficult annual general meeting for the company on Monday.
The Financial Times revealed on Friday that leading shareholders had written to the management board urging them to appoint two investor representatives to the review panel that is carrying out an investigation of the company structure.
The review was ordered after inaccuracies were found in Shell's reserve booking procedures, which sparked shareholder consternation and lawsuits in the UK, Europe and the US.
Last week, Shell bowed to shareholder pressure for a transparent review of company practices and named the five senior executives on the review panel.
Shell shares in London were down 0.6 per cent at 414.75p on Friday. Royal Dutch shares, traded in Amsterdam, dipped 0.05 per cent to €43.32.
Separately, Shell said it had sold its network of Portugese service stations and other assets in the country to Repsol, the Spanish petrochemical company.
Shell said the deal, which is subject to regulatory approval and is expected to be completed by the end of this year, also includes the sale of a 15 per cent stake in a Portugese pipeline and storage terminal in Aveiras, north east of Lisbon.
The group, which declined to give any financial details of the sale, also said it was in talks to sell its Spanish retail and commercial fuels businesses. The sale will exclude the LPG, lubricants, marine and aviation business, the company said.